Kroger Most Active Retail Banner in Co-marketing Promos: White Paper

ALBANY, N.Y. -- Kroger led all retail banners last year in frequency and page participation of co-marketing promotions with CPG companies, according to a new white paper from marketing information company Marx Promotion Intelligence/TNS Media Intelligence.

In 2004, Cincinnati-based Kroger Co. appeared in co-marketing promotions in nearly 96 percent of the standard free-standing insert (FSI) drops, and on more than 1.7 billion pages, according to the study, "Co-marketing Promotions: A Win-Win for Retailers and Manufacturers."

The other banners that most frequently ran co-marketing promotions in 2004 were Ralphs, King Soopers, Fry's Food & Drug, Dillon’s Grocery, Smith's Food & Drug, Fry's Marketplace, Giant, City Market, and Albertsons. In terms of page participation, the other banners were Albertsons, Ralphs, King Soopers, CVS Pharmacy, Fry's Food & Drug, Fry's Marketplace, Stop & Shop, Giant, and Smith's.

The white paper noted that the total number of retail banners taking part in such promotions has risen steadily every year since 2000, revealing "a growing acceptance of co-marketing as a viable promotion tool." Currently 150 banners employ co-marketing promotions.

Additionally, the top 25 banners with the highest co-marketing frequency took part in co-marketing events in about 67 percent of the weeks with FSI activity, up from 36 percent in 2001, the white paper reported. Seventeen 17 banners upped their frequency more than 100 percent over 2003, among them Meijer and Publix, with 23 banners appearing for the first time.

CPG companies are increasing their frequency of co-marketing promotions, as well, running them in over 32 percent of the 45 weekly FSI drops last year. In 2001 the manufacturers with the highest frequency ran co-marketing promotions only 14 percent of the time. The manufacturer with the highest frequency was 2004 was Altria Group, which includes Kraft and Philip Morris, while former leader Procter & Gamble slid to fourth place, reflecting the company's reduction of participation by about 300 million pages. Many of the 69 manufacturers that appeared in co-marketing promotions for the first time were smaller, based on sales volume. According to the white paper, this is indicative of "a trend in which manufacturers with potentially less shelf space or trade allowances may be turning to co-marketing to gain volume support."

Among the product areas proving the most popular in co-marketing promotions are cereals, up a whopping 103 percent; dry grocery, up 36 percent; and frozen foods, up 23 percent. Dry grocery logged the most pages in 2004 -- more than 1.7 million. Nonfood categories health care, personal care, and household products were among the top five in terms of page participation, although the last dipped from more than 1.2 billion pages to just over 850 million in 2004. Based on overall volume and growth rate of page participation, the white paper identified health care and frozens as the fastest-growing product areas.

In accounting for co-marketing promotions' skyrocketing popularity in the food retail sector, the white paper noted that they "allow grocery retailers to…[maximize] frequent shopper card and loyalty program usage, [increase] volume, and [build] brand awareness and equity. More importantly, co-marketing promotions provide another way for traditional grocery retailers to remain price- and value- competitive with the 'supercenter' mass merchandisers." By using FSIs, which are effective at providing price promotions to value-minded shoppers, "co-marketing promotions are able to deliver a clear message to a large audience, helping both manufacturers and retailers work toward achieving their promotion goals."
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